Survey highlights jitters of investors over TAIEX

NOT-SO-BRIGHT A poll conducted on investor confidence found that investors were pessimistic about the main bourse's performance next year

By Joyce Huang / STAFF REPORTER

The predicted economic slowdown next year appeared to worry the nation's stock investors, with a recent poll showing they are pessimistic about the market's momentum over the next six to 12 months, according to a bi-monthly survey released yesterday.

The index of investor optimism dropped by 20 points from negative 8.31 in October to negative 28 points this month, according to the survey.

The poll was compiled by Shih Hsin University's finance department and the Chinese-language Win Win Weekly (今周刊) from their bi-monthly poll on investor sentiment.

PESSIMISM

"A pessimistic sentiment toward potential capital gains from stock investments in the next six to 12 months -- along with the widely-expected economic downturn in the next half year -- can be attributed to the index's 20-point drop," said Kuo Min-hua (郭敏華), an associate finance professor at Shih Hsin University.

The index, which peaked in February at 107 points in positive territory, was pushed down to negative 28 points in June and further dropped to its lowest point yet in August this year.

The sentiment index moved in tandem with the benchmark TAIEX, which peaked at 6,916 points in February and then declined to a low of 5,352 in August before jumping to 5,772 in early September.

Among this month's 20-point plummet, the personal index dropped by 12 points from five points in positive territory in October to negative seven points this month while the economic index dropped by eight points from negative 13 points in October to negative 21 points this month.

"The sentiment index showed that stock investors stopped having high expectations on the stock market and sobered up, which can be seen as a good sign that the stock market has hit rock bottom," said Win Win Weekly's president, Andy Liang (梁永煌).

Now might be a good time for bottom-fishing and profits will be foreseeable in the next three to six months, Liang said.

OPTIMISM

Liang cast an optimistic sentiment toward the TAIEX's momentum early next year, saying that the nation's affluent capital -- after confidence rises following uncertainty in the wake of the legislative elections -- is expected to be re-injected into the TAIEX to push up the benchmark.

In addition, the sentiment survey found that nearly 50 percent of respondents expect the property prices to rise in the next year, although some 81 percent of respondents said that they are unlikely to shop for houses next year.

Moreover, nearly 52 percent of the survey's respondents said that they expect the New Taiwan dollar to further strengthen against a weaker US greenback in the next three months. Among them, 40 percent believe the local currency's expected appreciation will have a positive impact on the TAIEX's momentum, while 33 percent are pessimistic.

The survey polled over 1000 stock investors between Dec. 12 and Dec. 19.